Welcome to the Fishing Report. It is cloudy this morning and warm. I didn’t wear a jacket this morning, didn’t need one. Little River is at the ideal flow and it is getting down to normal. Currently the flow data at the “Y” is recorded at 234 cubic feet per second. Normal for this date is 193 cfs. I just looked out the fire escape door with my binoculars to count the cattle like I do every day. There were no visible cows, they must be in the field next to the Visitors Center. What I did see was a large flock of turkeys. That is appropriate being this is the day before Thanksgiving. Then I looked up toward Bethel Baptist Church to see if Steve the Pastor was watching the turkeys. He is an avid turkey hunter and even gave a sermon one time dressed in camo. I didn’t see him. I asked him one day if he saw all the turkeys in the field one morning when I had. He said, “There aren’t any turkeys over there”. Yea Steve, right.

Fishing is still kind of slow. But you can catch them. Anglers say they are catching a few. The trout are taking nymphs. Dry flies are working sometimes. I would use nymphs unless I found trout rising or the nymphs were not working. Then I would probably tie on a blue wing olive dry and try that. You might find some cream colored midges on the water and trout rising to them.

Later this week the temperatures will drop. They say Friday night will dip into the low 30’s and maybe the high 20’s in the valley. Of course it will be colder up in the mountains. Fishing will be slower this weekend due to that.

Did you hear about the bison problem at Catalina Island, California? Someone turned a handful of bison loose in the 1920’s for a movie shoot. By the 60’s there were 600 roaming around the island. Now they have overpopulated and threaten the island’s ecosystem. The Conservancy that manages most of the island’s wilderness areas have tried capturing the animals and moving them to ranches and Native American Reservations. That is too expensive. So, they are rounding them up and injecting an animal contraceptive in the females, hoping to control the population. They want to keep a small herd because it is good for tourism.

Now, when I watched that story last night on CNN my first knee-jerk reaction was to solve the problem like we would here with deer, bear or wild boar. Get the hunters to do it for them. They could probably auction off hunting permits for a lot of money and the herd would be thinned by people.

I did watch the story again this morning online. Go to CNN.com and search “Bison Birth Control” and you can watch it too. After seeing these big beautiful animals drinking out of water tanks and roaming around like cattle, maybe hunting would not be the right thing to do. They are too tame, they looked like a bunch of pets.

If they don’t do something Mother Nature will take over and the herd will be thinned by some disease. Maybe what they are doing will work.

I’ve been listening to you and working on a plan to tweek our business model. Thanks to all of you for the huge amount of thought and e-mail. What I have learned by “Listening to our Customers” has been very interesting.

The best idea, or the one that struck a nerve and opened my eyes was our lack of catering to children. Kids under 9 years of age come in here and all we have to offer is a free lollipop and a place to play checkers. Everything else in the shop is for older people. And, one very important fact is, kids are not getting into fishing like they used to. Another important point that was made is, younger kids should start fishing with spinning or spincast outfits just like all of us did. They can move into fly fishing later. I haven’t talked to Paula about this but Daniel and I discussed the idea yesterday. We need kids fishing outfits, t-shirts, caps, vests and maybe hip boots. We need to sell bait fishing merchandise and get those kids out on the river. Spinners and Trout Magnets would be sold to. Now I don’t know about crickets and worms. That would be a tough one for me.

The second most popular idea was selling conventional tackle. Thousands of people visit Townsend, many of them fish, most of them don’t fly fish, so here is an opportunity to start building relationships with those folks. Maybe they will take up fly fishing later.

This will always be a fly shop, I guess. That’s what I want it to be.

Here is the problem. Most manufacturers of conventional tackle do not sell direct to small volume stores like us. Their minimums are too high. They sell direct to chains, big box stores and to distributors. We would have to buy from a distributor. The distributor has to make a profit on the tackle and if we marked it up to get the profit margin we need we would be selling the same thing at a higher price than Walmart or Bass Pro. If we lower our margin we would also have to lower our payroll which would affect our service.

As a percentage of sales, our payroll runs three to four times that of a big box store. Why? For one thing they are more efficient than we are. We do our own accounting, buying and marketing. We have people here waiting to give a lot of personal attention, listen to fishing stories, sell a fishing license and sometimes rig tackle that customers bought somewhere else. You would be surprised how many people buy used tackle on E-Bay and bring it in here to get it rigged. We don’t mind. We do that all the time. That’s part of our service. We consider it an opportunity. We also tell people where to fish, what to use and how to catch trout in the Smokies. That service is free. Of course we sell fly fishing tackle to many of our customers. That keeps us in business. Some people don’t buy anything, probably because they don’t fly fish. Even those who visit Townsend who don't fly fish come in here. We talk to them of course, but there is nothing for them to buy. In a big box store there is something for everyone.

So, it is a delicate balance for us. If we reduce our profit margin and don’t lower our payroll as a percentage of sales we will go out of business, plain and simple. If we reduce our margin and lower our payroll percentage our customer service will not be the same. Simple as that again.

Everyone in the fishing tackle business knows this. This factor of payroll percentage/service is easily understood by all of us. The big stores understand it and the small shops understand it. It is a fact of life. Like I said before, the big stores are more efficient than we are. I go into those stores and watch.

Maybe there is some middle ground. Maybe there is a business model somewhere between specialty and big. Some stores like that are around. One part of the store is dedicated to conventional tackle where the customer doesn’t need a lot of personal service. They know what they want and they pull it off the shelf. Then, in the other part of the store is a department where customers need more personal attention. That would be the fly fishing department.

One offsetting component of our store is the mail order business. That part of our business which is substantial has a very low payroll percentage cost. So, bringing in a department with a lower profit margin could be workable.

I think big box stores and chains do a great job. I buy from them all the time. I have a boat cover being delivered today from Cabelas. I buy a lot of stuff from Bass Pro. I like both of those companies very much. I bought some hunting gear from Dicks recently. I felt like I got good service there. I buy rifle and pistol cartridges at Walmart. I get some boating stuff there too. The guy who is usually in that department and I have become acquainted. He sends customers here. Heck, I’ll return the favor. If you are looking for ammo, which is hard to find right now, try Walmart in Alcoa. I like shopping at Gander Mountain in Knoxville. I know they all run a low payroll percentage but I still like shopping there. I don’t feel like I am neglected when I go into any of those stores. I do see a lot of people running around and working very hard, usually stocking shelves and slatwall displays. Like I said before, they are efficient.

I contacted Henry’s yesterday. They are one of if not the largest fishing tackle distributor in the Country. They have a distribution center in North Carolina among others around the country. I got the voice mail of the guy who will be our salesman. I’m sure we will meet soon.

I never thought we would go in a different direction. And we may not. We might just change a little. These are interesting times. Other than meeting nice people like you or working with the nice people here in the shop I like the challenge of trying to be successful in a business. Business is always changing, nothing stays the same.